How are smart energy solutions being used in Finland?

How are smart energy solutions being used in Finland?

Government Europa speaks to Karoliina Auvinen from the Finnish Clean Energy Association about how governments can promote smart energy solutions with tighter policies and incentives.

The energy decisions which are made today will have a major effect on the planet and the world we live in tomorrow. The European Commission is set on making Europe carbon-neutral and keeping emissions as low as possible. Finland aims to become fossil fuel free and has put forward many innovations and developments in smart energy solutions and renewable energy production.

Smart energy solutions mean, for example, that building owners and businesses can optimise the operation of their facilities, machines and processes using data about their energy use. The European Commission aims to replace at least 80% of electricity meters with smart meters by 2020, and this alone could reduce emissions in the EU by up to 9%. Finland already has 100% of its electricity consumers using smart meters as of 2013, making the country a frontrunner in the race to implement smart energy systems, such as demand response automation in buildings, industrial processes and district heating networks.

Despite this drive in smart energy developments, Finland is still working to increase the share of renewable energy production and to decrease emissions, particularly from transport. According to the latest report from Statistics Finland, 45% of the electricity produced in 2016 was from renewable energy, but 32% more hard coal was used in the production of electricity and heat than in the year before.

The Finnish Government is currently drafting a bill to prohibit the use of coal in energy production by 2029. The government subsidises renewable energy production and offers research and development funding for companies developing innovative energy solutions.
Wind power and bioenergy are currently the most successful renewable energy sources in Finland. There are around 700 wind turbines around the western coast converting wind into electricity. Finland is known for its large nuclear power production, although according to renewable energy experts, wind energy is currently at least €5-7 cheaper per megawatt to produce than nuclear power.

Government Europa spoke to Karoliina Auvinen from Aalto University and co-founder of The Finnish Clean Energy Association about her thoughts on Finland’s progression towards its climate targets and how the government could better promote smart energy solutions and clean energy using tighter policies and incentives.

Finland has committed to a climate neutral energy future by 2050. Do you believe Finland is going to achieve this?

In Finland we already use a lot of nuclear power and biofuels. The Finnish Government is focusing too much on replacing fossil fuels with bioenergy. Bioenergy in very large volumes is not sustainable; therefore other forms of renewable energy for improving energy efficiency should be incentivised more. Finland should aim to electrify the traffic and heating sectors. I have many doubts about whether Finland will be able to reach the electric and biogas vehicle targets and emission reduction target in the transport sector. Finland needs stronger governmental and municipal climate policies, especially in transport.

Traffic emissions fell by 14% from 2005 to 2015 and the Finnish target for the traffic sector is to reduce emissions by 50% in 2030. How can we accelerate this and ensure that transport emissions continue to fall?

It doesn’t look like Finland is going to achieve this 50% target by 2030. The incentives that the government is offering in order to get more electric and biogas vehicles on the road are not strong enough. Consumers are not responding to the moderate investment grants currently available, so taxes should be used to encourage people to invest in clean vehicles. Achieving decarbonisation requires more policies and drastic changes in the way we are travelling.

If we look at Norway as an example, consumers there don’t pay value added tax when they purchase electric vehicles. Currently, Finland is not using value added tax reductions as an incentive to promote the use of clean technologies. Finland has a carbon dioxide-based emission tax on cars, but it needs to be stronger to make fossil fuel cars a lot more expensive. At the moment, combustion engine cars are the cheapest option and this needs to change if we want to drive the market for cleaner cars.

Most of the road traffic emissions come from the larger city regions where there is a lot of commuting from nearby villages into the cities. I don’t think traditional public transport will answer these commuters’ needs. What we need more of are smart mobility-as-a-service concepts. Many cities and rural communities are currently testing smart mobility services and innovative door-to-door applications combining public transport with taxi services and car-pooling. We need more of a push from the government to ensure that these smart mobility developments get the funding and market growth that they need.

What has been the biggest improvement in Finland’s smart energy field?

The smart grid working group lead by the Finnish Ministry of Economy and Employment is currently working on a plan to improve the flexibility, sustainability and modernisation of the Finnish electricity market and infrastructure. The electricity market prices are not currently variable enough to drive the growth of demand response automation, however, the electricity market, grid and smart metering structures are very good for enabling flexibility and digital smart energy solutions.

The solar photovoltaics sector has been growing very nicely over the past three years. The smart grid working group is on the way to enabling digital solar electricity sharing for the residents in housing companies and other types of energy communities inside property grids.

What projects are you currently working on to promote awareness around renewable energy and to help make Finland carbon neutral?

At Aalto University, we are working on a smart energy transition project where we are looking at how Finland could benefit from the transition to clean energy solutions. We are working on a clean district heating and cooling vision to explain how coal and other fossil fuels can be replaced with industrial heat pump solutions connected to wind power, waste heat, solar energy and smart building solutions. If we want to achieve our 2050 goal, we can’t reach it with only bioenergy. We need more solutions and we need to be more innovative.

Solutions that the Finnish Government should be looking at include wind and solar energy, energy efficiency, demand response and all kinds of consumer smart energy solutions. Although solar is not as significant an energy source as wind power in Finland, it still has the potential to cover at least 10% of Finland’s primary energy needs.

As part of the CO2mmunity and FinSolar projects we are promoting renewable energy co-investment models. We need to better involve citizens and local communities in climate change mitigation and energy transition in order to solve the ‘not in my back yard’ problem.
Finnish Clean Energy Association is doing a lot of policy lobbying to promote distributed renewable energy and consumers’ smart energy solutions. The work mostly focuses on enabling energy users to make smart energy choices at the level of households, housing companies, SMEs and farmers as there are a lot of new business opportunities for companies. Finnish Clean Energy Association has a strong mandate from its company members to boost the development of smart energy solutions and ensure their market growth.

What does the future hold for Finland and its innovation in smart energy solutions?

The future can be very bright for Finland, as we have a lot of knowledge and excellent companies in this field. Focusing on smart and clean energy services and new business development for the energy users is a good way to go forward. Promoting better social transition and improvements in digitalisation of our energy system will provide a strong future for Finland.

Karoliina Auvinen
Project Manager
Aalto University


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